President Lee Jae-myung on the 27th said about the Bank of Korea's recent decision to hold its benchmark rate, "If we were to cut rates, it could fuel real estate prices, which are already a problem," adding, "Keeping the current rate level instead of cutting is the right decision for Korea's economic recovery and sustainable growth." In an interview with Bloomberg TV released that day, Lee said, "Interest rates are not the issue with Korea's economic situation." Instead, he noted that government economic policy and fiscal measures to back it up are needed.
After mentioning interest rates, fiscal policy and economic policy in order, Lee said, "Of these three, the most important is stable economic policy." He continued, "Past fiscal policy may not have been sufficient, but it was not lacking either," and added, "Through additional steps such as expanding productive finance, including the advanced technology development we are focusing on, we can build a foundation for economic recovery and sustainable growth."
Comparing Korea's real estate market with Japan in the past, Lee also said, "We are sitting on a time bomb of excessive real estate investment." Lee said, "Korea faces a very dangerous potential crisis," adding, "Looking at Japan, after the real estate bubble burst more than 30 years ago, it is still suffering economic pain. Unfortunately, Korea is heading down a similar path." He also said, "If this trend continues, the bubble will inevitably burst," and, "We must create channels for capital to flow into the more productive institutional sector of the economy." To that end, he said they "have worked to remove unnecessary regulations and irrational barriers in the capital market."
Lee said that "curbing real estate speculation" is the only way to achieve sustainable growth. Citing the KOSPI hitting a record high, he said, "If we continue policies that curb speculative real estate investment and channel capital into productive areas, we can maintain this positive momentum," adding, "This is the only path to normalize Korea's economy onto a healthy and sustainable growth track. We cannot give up this path."